Jaiprakash Power shares jumped 10% today; here's why

Jaiprakash Power Ventures Ltd (JP Power) shares jumped 10 per cent in Monday's trade after the company informed stock exchanges that it has agreed to settle the claim, subject to payment of Rs 511 crore as full and final payment and fulfilment of certain other conditions and execution of definitive agreement, following which the Insolvency and Bankruptcy Code (IBC) proceedings will stand withdrawn.

"The IBC proceedings will stand withdrawn once all the conditions of settlement terms are fulfilled. The company will keep the stock exchanges informed of any further developments in this matter," JP Power said.

Following the development, the stock rose 9.64 per cent to hit a high of Rs 16.83 apiece on BSE. The stock is down 5.7 per cent year-to-date.

The news comes amid a clarification from Adani Power Ltd denying a media report that suggested Adani Power was likely to increase its stake in JP Power to 51 per cent before the end of 2026.

"We would like to clarify that this article is entirely false. Adani Power Limited has not undertaken any such action, as claimed in the article," Adani Power said.

Crisil Ratings had on August 31 placed the JP Power's credit rating on negative watch on March 11, 2026, after the National Asset Restructuring Company Ltd (NARCL) filed an application against the company before the National Company Law Tribunal (NCLT) under the provision of section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The application had alleged default of Rs 512 crore, plus interest and other charges with respect to the corporate guarantee extended to Jaiprakash Associates Ltd (JAL).

The disputed amount pertained to the corporate guarantee extended by JP Power to JP Associates external commercial borrowings (ECBs) from State Bank of India (SBI), which was required to be released by the SBI as per the framework agreement signed in April 2019 as one of the conditions of the restructuring plan of JP Power.

SBI had sent a demand-cum-recall notice pertaining to the same in December 2023 and took the matter to the Debt Recovery Tribunal (DRT), New Delhi.

After restructuring of debt in April 2019, JP Power's total debt reduced to Rs 4,870 crore, including long-term debt of Rs 4,361 crore, as on December 31, 2022, from Rs 11,149 crore as on March 31, 2019. As on March 31, 2026. Its total debt was Rs 3,380 crore.